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September / december 2016

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › September / december 2016

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by Kim Smith.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 21, 2018 at 12:45 pm #485396
    jihun lee
    Member
    • Topics: 117
    • Replies: 51
    • ☆☆

    Sep / dec 2016, question name Raven&Co, part (b), in military research, shouldnt it be material & pervasive ?

    Because kaplan textbook says that

    If so confined, represent or could represent a substantial proportion of the financial statements is considered pervasive

    What does this substantial propotion mean ? Does it mean 50% of the materiality ?

    I do not understand when an item is considered as pervasive when materiality of militarity project already surpasses 10%

    Thank you.

    November 21, 2018 at 5:15 pm #485411
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    I don’t understand the explanation you have copied from the text (and I don’t have a copy of the text), but please see here my explanation to a similar query https://opentuition.com/topic/poodle-june-13/

    November 24, 2018 at 5:32 am #485743
    jihun lee
    Member
    • Topics: 117
    • Replies: 51
    • ☆☆

    Hi tutor,

    I ve written down some parts from the text.

    It’s considered pervasive if
    1. Effectd are not confined to specific elements, accountd or items of financial statements (fs); or

    2. If so confined could present or represent a substantial proportion of fs; or

    3. Fundamental to users’ understanding of fs in relation to disclosures.

    So when we see in no. 2, how do we determine that substantial proportion ?
    For materiality, we can determine using percentage calculation but im not sure how we determine that ‘ substantial proportion’

    I did understand no 1 and 3 but number 2 is quite ambiguous

    Thank you

    November 24, 2018 at 2:47 pm #485786
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    You are not going to be asked to regurgitate explanations in a particular text. Simply understand that if you can say “except for this and except for that and except for the other. .. shows a T&F view” the FS as a WHOLE are still ok. Pervasive is extreme and related opinions exist more in theory than in practice.

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